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McKinsey report on Sweden

What are your thoughts?

Low public debt, a current account surplus and an economic growth rate that over the past15-20 years has exceeded the growth rates of both the United States and the EU-15. TheSwedish economy is currently held up as a role model internationally, not least in light of thecurrent financial crisis in Europe. It is primarily the international sector1, and especially themanufacturing industry, that has been the main engine of growth in the Swedish economyand has helped the country outperform the EU-15 since the early 1990s.This performance has put Sweden in a strong economic position compared with many othercountries. Yet, Sweden faces several challenges going forward. It is only the internationalsector (representing about one third of the overall economy) that has experienced anindisputably strong growth, significantly stronger than the average in the EU-15 during 1993-2010. Growth in the Swedish local services sector was only in line with the EU-15, while theSwedish public sector experienced a negligible growth in its value added in the same period.This is unsatisfactory, especially as these sectors together account for about two thirds of theSwedish economy. There are also a number of concerns about Sweden’s long-term growthoutlook such as the increasing competition from emerging economies, the declining qualityof the Swedish education system and an ageing population.In order for Sweden to be able to sustain and improve its economic growth in the comingdecades, the country should strive to move from one to three strong engines of economicgrowth and also improve the economy’s long-term competitiveness by further expandingthe supply of skilled labor. To achieve this, Sweden would benefit greatly from boldmeasures in five areas:1. Increase productivity significantly in the public sector. With an ambitious approach,there are good reasons to believe that productivity in the public sector could be raisedby 25-30 per cent over the next ten years (while maintaining the same level of quality).Key elements include more ambitious targets, greater transparency on results,consolidation of Sweden’s public administration structure (primarily the municipalities)and a national centre of excellence for public procurement.2. Improve growth in the local services sector through a second wave of deregulationand regulatory reforms. Sweden used this tool successfully in the 1980s and 1990s,but there are still many areas that remain to be addressed. A good approach could beto systematically eliminate growth-inhibiting regulations industry by industry through ajoint effort by politicians, employers and trade unions.3. Sustain the high growth in the international sector through increased innovationproductivity. Competition from companies in emerging markets is increasing rapidly,as is the pace of innovation globally. The number of engineers in the world, for instance,more than doubled from 1998 to 2008 and increased by a factor of four in China.Sweden should therefore ensure that it maximizes the return on its R&D investmentsby becoming a leader in innovation productivity in the same way as it has become aleader in production efficiency in many industries. Can Swedish business be a frontrunner in creating global innovation models in the same way as it was in globalizing itsproduction and sales?1 “The international sector” refers throughout the report to the sector of the economy that isexposed to international competition.Summary104. Make Sweden a world leader in education. McKinsey’s previous school reports haveshown that the most important area to address if the trend of falling school results is tobe reversed is to significantly raise the skills profile of teachers and school leaders, forexample through teacher coaching programmes and by increasing the attractivenessof the profession.5. Increase the share of the population in employment. Address the high rate ofunemployment among young and foreign-born people, for instance by exploringa Swedish apprenticeship model, and by counteracting the effects of the ageingpopulation, for example by following the Danish model of linking the retirement age tolife expectancy.Sweden’s stable fiscal position gives it a golden opportunity to build an even strongerfoundation for robust future growth over the next few years while other countries face thetask of addressing their acute financial problems. Sweden also has a culture of consensusand less political tensions than many other countries, which, if this tradition is maintained,should improve the prospects of finding pragmatic solutions. By taking these measures,Sweden will be in a good position to achieve equally strong or stronger growth in the futureas in the past 15–20 years. These are the findings presented in this study of the Swedisheconomy by McKinsey & Company Sweden in collaboration with McKinsey Global Institute.This is the third time McKinsey & Company Sweden, together with McKinsey GlobalInstitute, is conducting a comprehensive study of the Swedish economy. The first studywas published in 1995 and the second in 2006. The aim is to contribute facts to the debateabout Sweden’s economic priorities and how best to achieve them.

The partners of McKinsey fund MGI's research; it is not commissioned by any business, government, or other institution.

One thing that You do need to remember is that whilst the report is not commissioned by government, they are actually the main Consulting Partner in certain projects. eg. McKinsey were the primary consulting company in the Migrationsverket project for Lean processes, and most likely involved in the same with Försäkringskassan, since it is the same General Director (he moved from MV to FK)...and other areas.

QUOTE (MassiveAttack @ 13.Jan.2013, 12:13 AM)

Works of most consulting firms are based on empirical researches. However, most of their works lack on scientific qualities and proves. There are often no causal relationships
... (show full quote)

Works of most consulting firms are based on empirical researches. However, most of their works lack on scientific qualities and proves. There are often no causal relationships between variables.

There is no wonder, because most of consultants don´t know how to research.If you want to learn how to research, then you should have completed a PhD.

Be careful even if it is from McKinsey, because most consultants are put under pressure to get results as fast as they can.
... (hide full quote)

And that statement shows You know nothing of the Business World. McKinsey are one of the most respected Consulting Companies in the World, for good reason.

It is easy to get a PhD, it is VERY hard to become a partner with McKinsey. And it is even harder to build and maintain the respect the business world has for McKinsey Partners.

And that statement shows You know nothing of the Business World. McKinsey are one of the most respected Consulting Companies in the World, for good reason. It is easy to get a
... (show full quote)

And that statement shows You know nothing of the Business World. McKinsey are one of the most respected Consulting Companies in the World, for good reason.

It is easy to get a PhD, it is VERY hard to become a partner with McKinsey. And it is even harder to build and maintain the respect the business world has for McKinsey Partners.
... (hide full quote)

In general I frown on argumentum ad verecundiam, however in this case I have to agree with Yorkshireman. When McKinsey Partners comes to a conclusion & makes recommendations they should be taken very seriously.

No it is more like McKinsey employees and their work products are highly sought after coveted and highly compansated because their intellectual products create efficiencies, cost savings and cost benefit analysis to bring in investment, new job creation and new industry, This is different from a tenured academic PhD that everyone grumbles about because they cannot get rid of their worthless butts. Just look at Paul Krugman, the Phd and Nobel Economics Award winner and how he is basically an unproductive laughingstock.

No it is more like McKinsey employees and their work products are highly sought after coveted and highly compansated because their intellectual products create efficiencies, c
... (show full quote)

No it is more like McKinsey employees and their work products are highly sought after coveted and highly compansated because their intellectual products create efficiencies, cost savings and cost benefit analysis to bring in investment, new job creation and new industry, ...
... (hide full quote)

A nice try.

I am not familiar or linked to Paul Krugman or his works, but he is a smart person when I met him.

Because you don´t want to agree his opinion, doesn´t mean that he is useless.

Don´t get me wrong. I work as consultant (Not Mckinsey), but there are lots of problems, which are not well known in public.We sometimes have lots of problems with our rotation, our strategy and if we don´t have much time, then the quality is not always the priority.They never worry about that, because they say that they are from McKinsey.

Lots of smart and intelligent people also work at Goldman Sachs or other investment banks.Do you highly agree that some of their parts make job savings, efficiencies etc. possible??

It is easy to get a PhD, it is VERY hard to become a partner with McKinsey. And it is even harder to build and maintain the respect the business world has for McKinsey Partners.

I assume you have no experience from the academic world, or have experiences that dates at least 30 years back. Academics today is a cut-throat environment and it is extremely difficult to 1. Be accepted and receive funding for a PhD. 2. Finish the PhD. 3. Acquire research funding and a tenured professorship. In fact, even to become an assistant professor (not tenured) you need jump between several 1-2 year post-doc positions at different universities, and each of those is often badly paid, require a very good resumé and require you to spit out highly ranked published research papers like a machine gun.

So unless you absolutely love to do research, love competition and are willing to put in long hours of hard work for a meager salary, I would not recommend academics.

I'm not saying that it is easy to become a partner at McKinsey, but it is certainly not easy in any way to advance to a tenured position in academics. Both involve extreme competition.

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